Accept Tenant with CCJ & Guarantor or not..

Alias_Omega

Sign paperwork with agent Wed Am.

Property advertised on Friday Am.

Friday PM, received telephone call from LA telling me that someone wants to view the house at 8-40am. Can i do it? Yes, i say.

Friday Evening, Spend most of night cleaning & making sure property looks its best in its state.

Saturday Am, Agent is late. People arrive (Assumed Tenant plus elderly Parent). Show them around, they happy with house. They want it.

Saturday Am + 1hr, Telephone call from Agent, Person has paid the £100 admin fee for a credit check, they want the house.



Monday Am, Telephone call from LA, Person has failed credit check with 1 CCJ. As im not taking out rent Guarentee Insurance, will i be willing to accept Person as tenant, with a Guarantor.

Speak to Mrs Alias, appears yes. Mrs Alias has a CCJ from years ago.

Soon after, the 'To Let' board went up outside, and someone who was passing in the close came and knocked on the door asking about the house. We showed them around, probably a better tenant as both working etc.

Really shocked by the fast turn around, or maybe they were on the waiting list of the LA.

Monday Pm, Draft email to LA informing them that we would be happy to accept, if a reference from previous landlord (currently living with parents) & Guarantor checks out good.

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I really think we may have mis-priced the house seriously. The same house 4 doors down is £435 a month, and in a worse condition. We went with £390 a month (£90 per week), but wanted to be competitive with other houses locally (mainly 2 beds).

Mortgage is only £292 a month, so well over the costs.

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So i ask, would you go with this tenant, or would you hold out..?

Alias

BitterAndTwisted

If you've got a guarantor (who I'd be credit-checking as well) I don't see what the problem is.

clutton_2

i would take someone working anyday against someone who has CCJ - if they have mishandled their finances once, they could well do so again..

getting money out of guarantors is not easy... some will try to wriggle out of their obligations when push comes to shove and you may have to take them to court....

slarty_2

Having a single ccj doesn't necessarily mean they have only ever defaulted on one occasion - people get savvy as to how to avoid getting more ccjs while still maintaining their evasion of bills.

I took on a tenant once in exactly the same circumstances - he didn't have terrible credit record, one ccj and earned a decent amount as a hairdresser, plus a guarantor was put in place by the letting agent. He left owing some rent and costs of repairs, and when I first contacted him he agreed to pay.

After being strung along for several weeks I contacted a solicitor - the tenant then produced signed letters from his friends saying they had inspected the property and there was no damage, plus made up text messages where I had apparently assured him that there was no rent owing.

The solicitor then said it was likely to go to court and it would cost several hundred pounds to go through with it, plus the tenant had these 'witness statements' so there was no guarantee of success. He owed around a thousand in total so in the end I decided it wasn't viable and left the matter to rest. There would be no trace on his credit record of this non-payment.

The fact that there was a guarantor in place made no difference as the guy was so adept at avoiding his debts. For months afterwards there were envelopes from collection agencies being sent to the property so he'd clearly evaded paying a lot of people.

Come to think of it he was pretty much a thief but stole in a way that meant it was always a civil matter and not a criminal one.

But even if a person is genuine and honest (i.e. not like the tenant I had) and has just ended up getting a ccj in spite of trying to pay - this just proves they're not so good with their finances and so I think they're still best avoided for the purposes of letting a property. (Remember that assured tenancies mean they're in for 6 months whether they've paid or not.)

I know not all people with ccjs are as bad as the tenant I had to deal with but I can't afford to take the risk again, so any ccjs against a tenant and I decline straight away. Plenty of good tenants out there, so I'd much rather wait.

property.advert

Do you know the LHA for your property ? If not - you should have found out. Why ? because a high LHA raises the price for properties which should, in a free market, be lower than the LHA. That situation exists where I live, with prices raised by perhaps 20% to 30%. There is no incentive to put out a good property but if you do, then you can attract a premium to the LHA. So, I guess the OP may have undervalued their property.

Would I take a CCJ on this ? probably not, but I would not take the first person who came along either. You don't offer a job to the first person who applies do you ?

I'd check the LHA figure and potentially remove it from letting at the current price and re market, asking the working people if they wanted it or not. You could even bypass the agent as they didn't introduce the working renters.

Alias_Omega

Hi,

We think we are well priced for the market / area. Priced to be rented and not sit empty for months. An example on this is a property 4 doors down. Slightly worse condition but up for £435 a month without accepting LHA.

Our financial situations does not ideally leave in a position to have a vacant property under out belt for 12 months. The costs associated with this are huge, close to about £420 a month if vacant.

I will speak to the Letting Agent this morning and find out when the tenant had a CCJ, and maybe track day a previous landlord, and ask them for a reference.


Though, i think you all are right. We should hold out for a working couple, and not jump at the first person to show an interest.

Jowo_2

Remember, when a person has a CCJ, its pretty much a last resort by the organisation that raises it who will have tried to have resolved it with the person. An unsatisfied one also shows the defendent was either not in the position to pay it promptly after the judgement or could pay but wouldn't.

As per the previous poster, a single CCJ may not represent a single problem but be representative of chaotic personal finances, a failure to honour contracts and an attitude problem.

N79

Did the T declare the CCJ in advance or did you only find out when you credit checked?

It know it sounds like a silly criteria but I might disregard 1 small, satisfied, CCJ from a few years ago if the T had already told me about it, is willing to let me view their bank statements and provided there was a property owning guarantor. If I find out about it first on the credit check then I would not take the T. If there is anything else untoward on the credit check (eg regular missed payments) then I would not accept the T.

However, I would always also require at least 1 T to be working. It is not clear from your post if this is true for your first T.

clutton_2

""(Remember that assured tenancies mean they're in for 6 months whether they've paid or not.)""

not true - as soon as a tenant is 8 weeks in arrears, you can apply for a court order for possession - but if they pay up (to even just 1p under the 8 weeks amount) on the day of the court hearing the judge will throw out the case

jamesb1239

So people with CCJ's shouldnt have somewhere to live? How about bankrupts?

Also just because somebody is working it does not mean that their finances are in order.

N79

jamesb1239 wrote: »

So people with CCJ's shouldnt have somewhere to live? How about bankrupts?

Also just because somebody is working it does not mean that their finances are in order.

No one has said that they should not have somewhere to live but different LL's operate in different markets and people with a history of failing to meet their obligations can and should expect to pay more for a less desirable property.

True - but someone who is working has an income and hence it is possible to recover outstanding debt. A person with no income and no money can not pay outstanding debt and hence they are a riskier proposition.